AAR: 5% GST is Applicable on Supply of Badla/ Imitation Jari/ Metallic Yarn

The applicant, Sumilon Industries Private Limited, manufactures Metalized Yarn along with Metalized Polyester Films, Metalized and Lacquered Polyester Film, Speciality & PCT PET Films, Metallic Yarn Jari and Kasab, etc., Resin, Intermediates, Chemicals, Dyestuff and Packaging Materials.

The applicant sought an advance ruling before the Gujarat Authority for Advance Ruling (AAR), asking the following questions:

i. Whether any significant difference is there between “Metalized Yarn” and “Metallic Yarn” or both are one and same and what will be their Classification?

ii. Whether the Supply made of Badla / Imitation Jari / Metallic Yarn made from Micro Slitting process done on Plain Polyester Film or Metalized Polyester Film or Metalized & Lacquered Film will fall under merit classification under HSN 56050090 or 56050020?

iii. If the answer to Question No. 2 mentioned above is 5605 0020, then whether the Applicant is eligible for concessional rate of 5% w.e.f. 27.07.2023?

iv. If the answer to Question No. 2 mentioned above is 5605 0020, then whether the Applicant is eligible for Refund on “Polyester Yarn”, Lacquered Film, Chemicals, Packing Material, and Coal etc. till Dt. 19.08.20237?

V. If the answer to Question No. 2 mentioned above is 5605 0090, then whether the Applicant is liable to Rate of 12%?

vi. If the answer to Question No. 2 mentioned above is 5605 0090, then whether the Applicant is eligible for Refund on “Polyester Yarn”, Lacquered Film, Chemicals, Packing Material, and Coal etc.?

As per the Gujarat AAR, the supply of Badla/ Imitation Jari / Metallic Yarn that are manufactured from micro slitting process on Plain Polyster Film or Metalised Polyster Firm or Metalized & Lacquered Film is catogrised under 5605 00 20 and attracts a GST rate of 5% as per notification No. 1/2017-CT(Rate) dated 28.6.2017 and Notification No. 9/2025- CT (R) dated 17.09.2025.